Anywhere Sikochi

Anywhere Sikochi

Assistant Professor of Business Administration (Leave of Absence)

Assistant Professor of Business Administration (Leave of Absence)

Accounting and Management
+1 (617) 496-3756
 
Anywhere Sikochi
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(617) 496-3756
Featured Work Publications Research Summary Teaching Awards & Honors
Overview

Having grown up in a developing country, Professor Sikochi’s research focus is driven by a desire to understand how capital flows to firms and entrepreneurs with the ultimate goal to help build capital markets in the developing economies. To this end, he conducts research for scholarly and case publications under three broad categories in credit ratings, debt capital, and sustainability.

Credit ratings and rating agencies as gatekeepers

A fundamental tenet in financial reporting and control is that the financial system enables capital flows from investors to entrepreneurs. One of the enablers of the financial systems is the presence of intermediaries. Professor Sikochi's primary research focuses on one of these intermediaries, namely credit rating agencies. Rating agencies are companies that specialize in assessing the credit risk of debt issuers (i.e., governments, companies, universities, other organizations, and financial instruments). Their opinions, expressed as credit ratings, significantly impact how investors allocate capital.

Policy makers around the world seek to curtail the dominance of rating agencies. These efforts stem from the notion that, as for-profit companies paid by issuers, rating agencies have conflicts of interests that diminish ratings’ timeliness and accuracy, and potentially lead to disruptions in capital markets. Professor Sikochi's research explores this notion, examining whether and how rating agencies provide objective and timely ratings for issuers. For example, in one project, he empirically analyzes the historical ratings patterns for a sample of high risk relative to low risk firms in the period leading up to default. In another study, he analyzes how properties and relevance of credit ratings assigned to foreign companies change when the Big 3 rating agencies establish local presence overseas.

Debt capital and organizational characteristics

In addition to understanding credit rating agencies as key intermediaries in the financial system, he also explores the sources of debt capital and examine the factors that drive a firm’s access to and the cost of debt. For example, his paper “Peer Influence on Trade Credit” published in the Journal of Corporate Finance, documents that non-financial firms are also a source of financing to other non-financial firms and that their lending behavior can be influenced by their peers. In another paper, “Corporate Legal Structure and Bank Loan Spreads” also in the Journal of Corporate Finance, he explores how creditors perceive a firm’s corporate legal structure and find that creditors demand higher interest rates when borrowers have a complex corporate legal structure.

Sustainability and Emerging issues in capital markets

Issues related to Environmental, Social, and Governance (ESG) are increasingly permeating the debt markets. Major credit rating agencies now incorporate ESG considerations in credit ratings. Similarly, ESG considerations are increasingly influencing lending contracts. In this line of research, he explores ESG performance ratings, and measurement and impact of management gender and diversity on capital market outcomes.

Anywhere (Siko) Sikochi is a Berol Corporation Fellow and assistant professor in the Accounting and Management unit, where he teaches the Financial Reporting and Control course in the MBA required curriculum. He is a faculty affiliate to the Gender Initiative at HBS and the Center for African Studies at Harvard University. His research is directed at information disclosure, debt contracting, and credit risks associated with firm operations and organizational forms.

Professor Sikochi earned his PhD in business administration at the Penn State Smeal College of Business. He previously received an MBA from the University of Virginia Darden School of Business. Before his graduate studies, Professor Sikochi worked at a branch of FTI Consulting and at Charles River Associates.

A native of Zimbabwe, Professor Sikochi came to the United States to attend Middlebury College, graduating with majors in economics and Russian. He is active in the EducationUSA United States Student Achievers Program, which helped him prepare for U.S. higher education. He is also engaged in the PhD Project, an organization with a mission to increase the diversity of U.S. business school faculty. He and his wife are parents of four children.

Featured Work
Case Study: Harambe: Mobilizing Capital in Africa
Harambe was a non-profit organization whose mission was to build an ecosystem to identify promising young African entrepreneurs and provide them access to training, markets, capital, and support networks.
Research: Why is Corporate Virtue in the Eye of The Beholder? The Case of ESG Ratings

The paper examines whether a firm's environmental, social, and governance (ESG) disclosure helps explain some of the substantial disagreement across ESG rating agencies regarding what rating to give to individual firms. We predict and find that greater ESG disclosure actually leads to greater ESG rating disagreement. We also find that raters disagree more about ESG outcome metrics than input metrics (policies), and that disclosure appears to amplify disagreement more for outcomes. Overall, our findings highlight that ESG disclosure generally exacerbates ESG rating disagreement rather than resolving it.

Africa Research Center Webinar Series: COVID-19: Reflections, Challenges and Next Steps
In the early days of the coronavirus pandemic, Harvard Business School (HBS) leadership urged faculty seeking to contribute to not overthink their engagement—to do what they could for whom they could. That hit home with HBS faculty member Euvin Naidoo. Naidoo set out to bring the best of HBS and Africa together to share expertise and thought leadership via a webinar series.

Strategy and Capital Markets, on June 18, featured Professors Siko Sikochi and Laura Alfaro, with guest speakers Faheen Allibhoy (MBA 2003, managing director, head of the JP Morgan Development Finance Institution) and Victor Williams (MBA 1998, head, corporate and investment banking, Africa regions, Standard Bank), moderated by Euvin Naidoo.
Case Study: Transforming Transport and Mobility with LULA
Based in Cape Town, LULA was founded to create and operate a Mobility-as-a-Service platform with the aim to integrate different modes of transport through a one-ticket solution. LULA was “easy” in isiZulu, a language spoken in South Africa. Yet, it wasn’t easy for LULA to get off the ground. This case study is a series of three short cases exploring challenges and opportunities in the evolution of LULA over a five-year period. 
Case study: Performance Management at Afreximbank
Based in Cairo, Afreximbank was founded in October 1993 as a specialized continental financial institution designed to address the low level of intra-African trade, the decline in financial flows to Africa, the worsening external debt situation of many African countries, and the sharp reduction in lending to Africa by international commercial banks. This case study explores how the Bank introduced the Balanced Scorecard (BSC) to improve the Bank’s performance management system. The goal was to transform the Bank’s bureaucratic culture and processes into one more attuned to the fast-paced and dramatic changes happening in Africa. The case examines how the BSC is being used to implement the Bank’s strategy and the issues arising from its implementation, and the case facilitates a discussion on whether the Bank had become entrepreneurial enough to keep pace with the continent’s thriving, emerging markets.
Journal Articles
Other Publications and Materials
Working Papers
Cases and Teaching Materials
Research Summary
Overview

Having grown up in a developing country, Professor Sikochi’s research focus is driven by a desire to understand how capital flows to firms and entrepreneurs with the ultimate goal to help build capital markets in the developing economies. To this end, he conducts research for scholarly and case publications under three broad categories in credit ratings, debt capital, and sustainability.

Credit ratings and rating agencies as gatekeepers

A fundamental tenet in financial reporting and control is that the financial system enables capital flows from investors to entrepreneurs. One of the enablers of the financial systems is the presence of intermediaries. Professor Sikochi's primary research focuses on one of these intermediaries, namely credit rating agencies. Rating agencies are companies that specialize in assessing the credit risk of debt issuers (i.e., governments, companies, universities, other organizations, and financial instruments). Their opinions, expressed as credit ratings, significantly impact how investors allocate capital.

Policy makers around the world seek to curtail the dominance of rating agencies. These efforts stem from the notion that, as for-profit companies paid by issuers, rating agencies have conflicts of interests that diminish ratings’ timeliness and accuracy, and potentially lead to disruptions in capital markets. Professor Sikochi's research explores this notion, examining whether and how rating agencies provide objective and timely ratings for issuers. For example, in one project, he empirically analyzes the historical ratings patterns for a sample of high risk relative to low risk firms in the period leading up to default. In another study, he analyzes how properties and relevance of credit ratings assigned to foreign companies change when the Big 3 rating agencies establish local presence overseas.

Debt capital and organizational characteristics

In addition to understanding credit rating agencies as key intermediaries in the financial system, he also explores the sources of debt capital and examine the factors that drive a firm’s access to and the cost of debt. For example, his paper “Peer Influence on Trade Credit” published in the Journal of Corporate Finance, documents that non-financial firms are also a source of financing to other non-financial firms and that their lending behavior can be influenced by their peers. In another paper, “Corporate Legal Structure and Bank Loan Spreads” also in the Journal of Corporate Finance, he explores how creditors perceive a firm’s corporate legal structure and find that creditors demand higher interest rates when borrowers have a complex corporate legal structure.

Sustainability and Emerging issues in capital markets

Issues related to Environmental, Social, and Governance (ESG) are increasingly permeating the debt markets. Major credit rating agencies now incorporate ESG considerations in credit ratings. Similarly, ESG considerations are increasingly influencing lending contracts. In this line of research, he explores ESG performance ratings, and measurement and impact of management gender and diversity on capital market outcomes.

Teaching
Overview
Professor Sikochi teaches the required first-year MBA course Financial Reporting and Control. He is also a guest instructor in the second-year MBA elective course Doing Business in Africa.
Awards & Honors
Lifetime membership in the International Honor Society Beta Gamma Sigma.
Recipient of a 2015 Clement-Dawkins Travel Scholarship.
Recipient of a W. Edward and Kay M. Hastings Graduate Scholarship, 2012 and 2015.
Recipient of a 2015 Edward and Susan Wilson Graduate Scholarship in Business.
Selected as an American Accounting Association/Deloitte Foundation/J. Michael Cook Doctoral Consortium Fellow in 2015.
Recipient of a KPMG Foundation Doctoral Scholarship, 2011-2015.
Recipient of a 2014 American Accounting Association Diversity Section Doctoral Travel Scholarship.
Recipient of the 2014 William A. and Joan L. Schreyer Graduate Scholarship.
Recipient of a 2014 Peter E. Liberti and Judy D. Olian Scholarship.
Recipient of a 2013 J. Kenneth and Nancy N. Jones Graduate Scholarship.
Recipient of a 2012 Frank P. and Mary Jean Smeal Endowment Fund Scholarship.
Recipient of the 2017 FARS Excellence in Reviewing Award from the Financial Accounting and Reporting Section (FARS) of the American Accounting Association.
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